Stakeholders seek local refining of Africa’s crude oil amid energy crisis

Stakeholders at African Refiners and Distributors Association (ARDA), Nigerian National Petroleum Company Limited (NNPC) and Dangote Refinery have stressed the need for African nations to locally refine their hydrocarbon resources and reduce importation of petroleum products.

According to them, this strategic move would assure Africa’s energy security, as the continent’s growing energy needs are to met in a sustainable manner, while reducing foreign exchange expended on petroleum products imports.

The experts also said the development would ensure provision of employment and promotion of a strong market for African crude oil within amid the global apathy to fossil fuels.

The above observations were made during the visit of ARDA delegation to the NNPC headquarters in Abuja and Dangote Refinery in Lagos under the leadership of ARDA President and Chief Executive Officer of SAR Refinery in Dakar, Senegal, Mme. Marième Ndoye Decraene.

The team also included Nigeria’s Anibor Kragha, who is ARDA Executive Secretary and top executives from refineries and storage & distribution companies in Senegal (SAR, SENSTOCK and Elton Oil), Cote d’Ivoire (SIR and SMB), Gabon (SOGARA) and Zambia (Indeni), as well as the Department of Hydrocarbons in the Ministry of Cote d’Ivoire and ARSE, the Downstream regulator in Niger Republic.

Kragha acknowledged efforts of NNPC and Dangote Refinery in refining cleaner petroleum products locally in Africa and encouraged them to pursue the production of cleaner low-sulphur fuels to meet the continent’s growing petroleum products demands and avert a potential public health crisis in the ensuing years.

According to him, ARDA has been working with the African Union Commission (AUC) on adoption of harmonised, pan-African cleaner fuel specifications (AFRI-6 standards by 2030) and has progressed very far within the AUC endorsement process.

He stated that the coming on stream of the 650,000 bpd Dangote Refinery, which has been designed to produce AFRI-6 (10 ppm sulphur) fuels from the onset, would be a game-changer for the continent’s clean fuels journey and boost Africa’s energy security, while significantly reducing foreign exchange utilisation on imports.

He said: “We commend what Dangote Refinery and NNPC are doing to make their refineries come on stream as soon as possible. This new refining capacity will definitely serve as a game-changer for the various African economies.”

Kragha also stressed that storage and distribution infrastructure challenges across the African downstream value chain must be addressed for full positive impact of the incremental refining capacity to be felt by Africans.

In addition, he stated that the “Refineries of the Future” in Africa must focus on value addition by maximising petrochemicals, while reducing their overall carbon footprint.

To support such initiatives, Kragha disclosed that ARDA would be launching two funds in the future to support bankable projects identified by members – one for refinery upgrades to deliver cleaner fuels and reduce carbon emission, storage and distribution infrastructure and petrochemical projects and another for LPG sector development to promote adoption across Africa.

Mme. Decreane, in her remarks, thanked both NNPC and Dangote Refinery for granting the ARDA delegation access to their world-class facilities and congratulated them for their impactful investments across the African energy value chain to deliver sustainable energy solutions. She also thanked both companies for their support of ARDA and stressed that the Association is committed to achieving the common goal of a unique, sustainable African Energy Transition Roadmap. NNPC Limited is an ARDA Executive Committee Member, while both NNPC and the Dangote Refinery co-sponsored the recent ARDA-African Union Commission Study that determined the total cost of upgrading African refineries to produce cleaner, AFRI-6 (10 ppm sulphur) fuels would amount to $15.7 billion.

Group Chief Executive Officer of NNPC Limited, Mele Kyari, who was represented by the Executive Vice-President Downstream, NNPC Limited, Adeyemi Adetunji reiterated support for ARDA and commended its objectives while stressing the need for clear performance indicators to be enshrined in the association’s targets.

In addition, he stated that NNPC Limited would be willing to work with the ARDA Members represented during the meeting and others in Africa to ensure that the projected sustainable energy goals are achieved on the continent. Kyari expressed gratitude to the association for its efforts to ensure energy security on the continent and urged ARDA to focus on promoting all forms of energy to ensure the huge projected energy demand is met.

Group Executive Director at Dangote Group, Devakumar Edwin, said the group’s consistent focus on value addition in all its business areas drove the vision, design and execution the 650,000 barrel per day (bpd) refinery and petrochemicals project. He confirmed the strategic investment of NNPC Limited in the refinery project and advised that once commissioned the Dangote refinery should be able to meet Nigeria’s petroleum products demand.

Decrying energy poverty in Africa, especially the number of people without access to electricity, Edwin told the ARDA delegates that countries across the continent could unlock potential in their raw materials to solve unemployment problems, adding that the exploitation of sending resources away from the continent instead of building factories and refineries locally must be addressed.
Edwin stated that opportunities are huge in Nigeria and other African countries that must be tapped to the benefit of the people.